Linking smallholder farmers to horticultural markets

: a review of the effectiveness of produce marketing organisations and trust in promoting inclusive value chains

  • Nephas Munyeche

Student thesis: Doctoral ThesisDoctor of Philosophy

Abstract

This study examined the effectiveness of a cooperative managed Produce Marketing Organisation(PMO)and the function of trust in linking smallholder farmers to contemporary horticultural markets. The study is based on field work conducted in Livingstone, Zambia during the period 2009 –2013 that set out to review the capacity of a cooperative managed Produce Marketing Organisation to provide business development services (market information) to smallholder farmers engaged in horticultural production and marketing. The study also investigated the relationship between mutual hostage investments and trust in transactional exchange and investigated if smallholder farmer’s motivation to participate in certification programs is linked to their level of trust in the market integrator.

The study employed a mixed research methods approach through qualitative and quantitative data collection methods to test the study hypotheses. Data analysis was mainly conducted using the Statistical Package for Social Sciences (SPSS) involving calculation of frequency tabulations, chi square tests; Wilcoxon signed rank tests as well as the Spearman’s rank correlation coefficient test.

The results from this study indicate that Produce Marketing Organisations should not be viewed as the magic bullet that will solve all the market information requirements of smallholder farmers. As confirmed by the study results, the Farmers Green Market(the PMO used as a case study for this research)was capable of providing smallholder farmers with market information on food safety and quality standards required by contemporary horticulture markets as well as produce prices but was not equally successful in transmitting to the smallholder farmers information on produce volumes that were required by target markets. This in turn limited the ability of the Produce Marketing Organisation to influence the production strategies that were employed by the small scale farmers who supplied it with produce, not least because it was unable to secure contracts further along the supply chain.

The study point to the need to promote the rebranding of the market image and perception of farmers cooperatives by other value chain actors which has been tarnished by previous history of failure to fulfil market contracts and thus failing to promote smallholder farmers inclusion in agribusiness value chains. This reputational history continues to limit this cooperative managed Produce Marketing Organisation to engage with other actors and to create networks that could be beneficial for the inclusion of smallholder farmers in contemporary value markets.

This study also highlight that small scale farmers who trust their market integrators are committed to participate in certification programmes which entrench compliance to food safety and quality standards and general Good Agricultural Practices (GAPs) that are demanded by contemporary horticultural value chains, especially those linked to export. The study argues that the previously held assumption that price premiums are the main motivation for smallholder farmers to participate in certification programmes should be revisited as premiums paid for the increasing market demands on GAPs and food safety and quality are diminishing. The study results demonstrate that the smallholder farmer’s participation in certification programmes was initially a condition of external funding to set up the Farmers Green Market but is not a condition of supply. Continued supply to the Farmers Green Market will be increasingly linked to other variables such as trust and the quality of the working relationship with their exchange partners (in this case the Produce Marketing Organisation).

While previous literature has shown a relationship between hostage mutual investments and trust building between exchange partners, the study results indicate the contrary rather emphasising that while transaction specific investments are important, the partner’s ability to competently manage the resources for the mutual benefit of the exchange partners and the source of the funds used to acquire the assets are important considerations exchange partners consider in the trust building process.

The study recommends the need to strengthen the management of the Produce Marketing Organisation to become an effective link between smallholder farmers and the rest of the value chain. This needs to include investments to improve ineffective cooperative business management, improvements in marketing infrastructure that links market requirements to smallholder production and improved communications and logistics. This could be realised through the development of Public Private Partnerships to address market failures currently limiting smallholder farmer’s participation in value markets. Given an improved PMO, then investments in smallholder farmers training in farming as a business would be the next logical step; however, it is not necessary for this to include formal training in private standards unless the supply chain is export orientated.
Date of Award2017
Original languageEnglish
Awarding Institution
  • Coventry University

Cite this

Linking smallholder farmers to horticultural markets: a review of the effectiveness of produce marketing organisations and trust in promoting inclusive value chains
Munyeche, N. (Author). 2017

Student thesis: Doctoral ThesisDoctor of Philosophy